House votes against EU aviation emissions tax

Wednesday, November 14, 2012

The U.S. House on Tuesday approved legislation to ensure the United States will not participate in a European Union effort to tax American and other nations’ aircraft operators and air carriers for their emissions when flying into and out of the European Union.
The bill, approved by voice vote, is the Senate version (the European Union Emissions Trading Scheme Prohibition Act of 2011, S. 1956) of a bipartisan bill that was introduced in the House by Transportation and Infrastructure Committee leaders, including Chairman John L. Mica, R-Fla., and Aviation Subcommittee Chairman Tom Petri, R-Wis.
The bill now goes to President Obama for his signature.
On Monday, the European Union announced a one-year postponement in implementing the Emissions Trading Scheme (ETS) for international flights.
“Fortunately EU leaders who have promoted imposing an unjust tax on international aviation have temporarily backed off the emissions tax proposal,” Mica said in a statement. “The proposal must not be allowed to resurface in one year like a phoenix rising again from the ashes. We must ensure U.S. operators, airlines and consumers are not stuck with a future unfair tax burden.”
U.S. airlines estimated that this European tax could cost more than $3.1 billion between 2012 and 2020, which will ultimately increase the cost to passengers.
“An emissions tax on other nations’ civil aviation operators while those flight are in EU airspace is one thing,” Mica said. “However, imposing this tax over the entire flight, the bulk of which may be in another nation’s airspace or over international waters, clearly violates international law and U.S. sovereignty. This scheme has the appearance of nothing more than a cash grab by a struggling European Union, as there is absolutely no requirement that funds collected by EU Member States be used to reduce aviation emissions.”
In 2011, Mica led a congressional delegation to the European Union to convey opposition to the European Union’s plan. Mica also led a subsequent delegation to Montreal to meet with International Civil Aviation Organization (ICAO) leaders, EU representatives, and other officials regarding U.S. opposition to the ETS. ICAO is the primary organization responsible for setting international aviation standards.
In September 2011, 21 countries, including the United States, signed a joint declaration expressing opposition to the EU ETS. In November 2011, the global community came together in opposition to the EU’s plans when the ICAO Council approved a statement of opposition to the scheme.
The European Union’s tax scheme, unilaterally imposed on Jan. 1, 2012, applies to U.S. and other nations’ flights into or out of an EU airport, regardless of how long that flight is in EU airspace. If the plan is carried out in its current proposed form, beginning in April 2014, U.S. airlines will be required to pay an emissions tax to the EU member state to which they most frequently fly.
In addition to directing the transportation secretary to prohibit U.S. aircraft operators from participating in the ETS, the legislation directs the Federal Aviation Administration, the Transportation Department, and other appropriate officials to enter into international negotiations, including agreements to pursue a worldwide approach to address aircraft emissions, and to take appropriate measures under existing authorities to ensure U.S. air carriers are held harmless from any ETS unilaterally imposed by the European Union. The measure also prohibits the use of FAA, DOT, trust fund or any other appropriated funds from being used to pay any tax or penalty imposed on U.S. operator pursuant to the ETS, the House said.